Daily Forex Analysis – December 4, 2008

EURUSD Analysis.
EURUSD is forming a short term cycle bottom at 1.2562 level on 4-hour chart. Key resistance is now located at 1.2765, a break above this level will confirm the cycle bottom, and the following rebound could bring price towards 1.2950 zone. Initial support is located at 1.2562, only fall below this level will signal deeper decline to test 1.2329 previous low support. The price action from 1.2329 (Oct 28 low) is treated as sideways consolidation of long term down trend. Moving without trend in a range between 1.2329 and 1.3290 (Oct 30 high) is expected to continue in next several days.


USDCHF Analysis.
USDCHF fails to test 1.2198 resistance and pulls back from 1.2168, suggesting that a short term cycle top is being formed. Key support is now located at 1.1994, a break below this level will confirm the cycle top, and then deeper decline could be seen to retest 1.1828 level.


GBPUSD Analysis.
GBPUSD drops below 1.4776 support, suggesting that the fall from 1.5534 could possibly be resumption of long term down trend. Deeper decline is now in favor after consolidation. Initial resistance is now at 1.5069, as long as this level holds, we’d expect down trend to continue. However, above this level will signal further rally to 1.5200 zone.


AUDUSD Analysis.
AUDUSD formed a short term cycle bottom at 0.6332 on 4-hour chart. Further rally is expected to test 0.6617, if this level gives way, the next target would be at 0.6800 zone. Only break below 0.6332 will signal another decline towards 0.6200 level.


USDCAD Analysis.
No changed in our view, USDCAD is in down trend, and the rebound from 1.2125 is treated as correction to down trend. Further rise is still possible to 1.2750 zone in a couple of days. Initial support is at the up trend line on 4-hour chart, a break below this trend line support will indicate that the rebound from 1.2125 has completed, and following down trend will take price back towards 1.1700 zone.


USDJPY Analysis.
USDJPY is in down trend. Deeper decline is still possible to 92.00 zone in a couple of days. However, the long term key support of 90.92 (Oct 24 low) would more likely be held, and rebound could be seen before breaking below this level. Key resistance is now located at 93.68, above this level will indicate that the fall from 97.43 has completed.


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